Chris Carter takes a look at what's driving the growth market in classic cars, why Brexit is bad for the art market and how to make a mint from Star Wars.
"After the US election, people are going to be looking at investing in assets and this is a lot better than a painting on the wall," John Collins, who runs Ascot-based Ferrari specialist Talacrest, tells The Daily Telegraph. He is selling "the holy Grail of classic cars": a 1962 Ferrari 250 GTO the second of only 36 to roll off the production line.
If the $56m asking price is met, it will be the world's most expensive car. That's a lot of money for a set of wheels, but he may well make his target. In August 2014, Bonhams sold another Ferrari 250 GTO for $38,115,000 to set a new auction record.
The market in classic cars has been performing strongly for years, although it has slowed in recent months, according to Historic Automobile Group International. Along the way it has outperformed many conventional assets.
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For example, the FTSE 100 has roughly tripled over the last 20 years on a total return basis (including dividends) That's not bad, but you could have bought a sage-coloured Aston Martin DB4 Zagato in 1996 for £500,000 instead, as Daniel Pembrey noted in the Financial Times earlier this year. Last December, the same model matching colour and all fetched slightly more than £10m.
"That's a twentyfold increase, and while there are auction fees to consider, it also comes with an exemption from UK capital-gains tax." Classic cars are exempt from capital-gains tax, because the taxman classes them as a "wasting asset", with "a predictable life of 50 years or less".
They can also cut your inheritance-tax bill using a wheeze known as "gift and leaseback", as legal expert Carol Cummins explains to Rob Griffin on Lovemoney.com. Give the car away, and provided you live for at least another seven years, no tax will be payable on it when you die. In the meantime, you can use those hopefully seven-plus years to lease back and enjoy the vehicle, paying insurance and maintenance costs.
There are disadvantages. Maintenance costs can rack up quickly, while you need to find somewhere to store it safely. If you need to sell your car, you may not be able to do so quickly. Prices can also fluctuate widely. Ultimately, it's best to buy cars because you love them, treating any profits as a bonus. But if you fancy taking a closer look at some classic cars, hop along to the 2017 London Classic Car Show at the ExCel Centre, which will be celebrating 70 years of Ferrari from 23 to 26 February .
Why Brexit could see overseas buyers snap up British art
J Tomilson Hill III, the American billionaire art collector and vice-chairman of private-equity group Blackstone, paid £30m last year for The Portrait of a Young Man in a Red Cap.The painting, which was thought lost in the 18th century, is one of 15 to survive by 16th-century Florentine artist Jacopo Pontormo.
Since 2008, the painting has been on loan to London's National Gallery, but its previous owner, the 7th Earl of Caledon, sold the painting to Hill. The sale was controversial: Caledon allegedly broke a pledge not to sell the painting while it was on loan and to give the gallery a three-month warning before selling.
Following Hill's purchase, the government slapped an export ban on it, while the gallery tried to match the sale price. It duly did so last month, helped by a £19m hand-out from the Treasury. But because Hill made his offer in dollars and the pound has sunk since Britain's vote to leave the European Union last summer, Hill argues that the money raised by the gallery falls £5m-£7m short, The Sunday Times reports.
Bendor Grosvenor, an art expert who has worked on television programmes Fake or Fortune? and Britain's Lost Masterpieces, told the paper that Brexit had "seriously imperilled our ability to keep this extraordinary picture in the UK. The weaker pound means more and more art will be snapped up by overseas buyers, and we simply won't have the money to stop them".
Star Wars toys: stellar returns
On 15 December, Rogue One: A Star Wars Story, the latest episode in the biggest film franchise of all time, hits the big screens. That's not just good news for fans of the sci-fi saga, says The Sun on Sunday. "It could also be a great opportunity for savvy investors."
Toys made in 1977 to coincide with the release of the original Star Wars film have "rocketed" in price. For example, an original Darth Vader figure with a two-part lightsaber, which cost £1.99 at the time, will net you £8,000 today. A mint-condition Jawa with vinyl cape is worth £2,800, while one die-hard fan shelled out £26,000 for a Boba Fett last year.
There seems every chance that the toys now on sale to accompany the latest instalment will be just as collectible in decades to come. So this Christmas, ask for a figure of Jedi warrior monk, Imwe. He costs £18.98, but could be one day worth £3,487, reckons the paper. Similarly, a figurine of Jyn (pictured), played by actress Felicity Jones, could be worth as much as £5,997. Just be sure to leave them in the box.
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Chris Carter spent three glorious years reading English literature on the beautiful Welsh coast at Aberystwyth University. Graduating in 2005, he left for the University of York to specialise in Renaissance literature for his MA, before returning to his native Twickenham, in southwest London. He joined a Richmond-based recruitment company, where he worked with several clients, including the Queen’s bank, Coutts, as well as the super luxury, Dorchester-owned Coworth Park country house hotel, near Ascot in Berkshire.
Then, in 2011, Chris joined MoneyWeek. Initially working as part of the website production team, Chris soon rose to the lofty heights of wealth editor, overseeing MoneyWeek’s Spending It lifestyle section. Chris travels the globe in pursuit of his work, soaking up the local culture and sampling the very finest in cuisine, hotels and resorts for the magazine’s discerning readership. He also enjoys writing his fortnightly page on collectables, delving into the fascinating world of auctions and art, classic cars, coins, watches, wine and whisky investing.
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